The WACC of Venus Concept Inc (VERO) is 4.4%.
| Range | Selected | |
| Cost of equity | 4.40% - 13.40% | 8.90% |
| Tax rate | 1.40% - 1.50% | 1.45% |
| Cost of debt | 4.30% - 4.50% | 4.40% |
| WACC | 4.3% - 4.6% | 4.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | -0.54 | 1 |
| Additional risk adjustments | 3.0% | 3.5% |
| Cost of equity | 4.40% | 13.40% |
| Tax rate | 1.40% | 1.50% |
| Debt/Equity ratio | 68.79 | 68.79 |
| Cost of debt | 4.30% | 4.50% |
| After-tax WACC | 4.3% | 4.6% |
| Selected WACC | 4.4% | |
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for VERO:
cost_of_equity (8.90%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (-0.54) + risk_adjustments (3.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.